S&P stumbles as Moderna sinks on report questioning trial results

S&P stumbles as Moderna sinks on report questioning trial results

The S&P 500 closed lower on Tuesday, as investors focused on a report questioning Moderna's recent coronavirus vaccine early-stage trial results, wiping out modest gains on the benchmark index in the last hour of trading.

The floor of the the New York Stock Exchange (NYSE) is seen after the close of trading in New York
FILE PHOTO: The logo of the New York Stock Exchange (NYSE) is seen on the door in New York, U.S., March 18, 2020. REUTERS/Lucas Jackson

NEW YORK: The S&P 500 closed lower on Tuesday, as investors focused on a report questioning Moderna's recent coronavirus vaccine early-stage trial results, wiping out modest gains on the benchmark index in the last hour of trading.

Major averages fell to session lows in the wake of a report from STAT News that questioned the validity of the results of Moderna's vaccine trial, which the company had announced Monday. Moderna shares plunged about 10per cent after the report.

"The market is keen on health-care news much more than it is on economic data," said Art Hogan, chief market strategist at National Securities in New York. "We are largely baking in the second quarter being down significantly – GDP growth rates, earnings, economic data – but what we don’t know, what will drive markets will be incrementally good news on the healthcare front."

Stocks had initially edged higher as investors attempted to glean information from a mixed bag of results from major retailers.

Home improvement chain Home Depot fell after it missed quarterly profit estimates due to higher costs, while department store operator Kohl's Corp tumbled after reporting a bigger-than-expected loss.

Walmart Inc , on the other hand, exceeded expectations for quarterly revenue and earnings as online sales soared as consumers stockpiled essentials in response to coronavirus lockdowns. Still, its shares finished down after rising as much as 3.4per cent earlier.

"Everyone wants to take every retailer's report of being indicative of something, but at the same time staying open and doing stuff is good, it costs to do that," said Willie Delwiche, investment strategist at Baird in Milwaukee.

Advance Auto Parts climbed after the company said same-store sales improved significantly at the start of the second quarter, helping to lift the S&P retailing index.

Trillions of dollars in fiscal and monetary stimulus have helped the S&P 500 rebound nearly 35per cent from its March 23 intraday low. While the benchmark index is now less than 13per cent below its Feb. 19 closing record, gains have largely slowed in May on uncertainty over truly halting the spread of the coronavirus and allowing business to resume and rising U.S.-China tensions.

The benchmark index surged more than 3per cent on Monday, boosted by Moderna's promising early-stage data for a COVID-19 vaccine and Federal Reserve Chair Jerome Powell's pledge over the weekend to support the economy as needed until the crisis has passed.

Powell, in testimony to the Senate Banking Committee on Tuesday, said the central bank was continuing to consider ways to accommodate additional borrowers, and that Congress should consider anything to keep people out of insolvency.

Unofficially, the Dow Jones Industrial Average fell 1.56per cent to end at 24,213.76 points, while the S&P 500 lost 1.03per cent, to 2,923.48. The Nasdaq Composite dropped 0.52per cent, to 9,186.97. 2,923.48. The Nasdaq Composite dropped 0.52per cent, to 9,186.97.

(Reporting by Chuck Mikolajczak; Editing by Leslie Adler)

Source: Reuters

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